ATOME Energy PLC (AIM:ATOM)’s confirmation that its flagship 145MW Villeta Project in Paraguay has been granted Free-Trade Zone (FTZ) status by Presidential Decree is another big step forward, says broker Liberum.
Effectively, the status provides 3% effective corporate income tax (CIT) on profit derived from domestic sales to Paraguay and 0.5% Free Trade Zone tax on revenue from export sales.
In addition, ATOME will receive an exemption from CIT and/or withholding taxes including on remittance of profits or dividends by FTZ users to third countries.
Liberum adds it is only the sixth FTZ granted in Paraguay to date, which might be worth US$133 million gross across the forecast 25-year life of the Villeta project.
"FTZ status is also the latest milestone ATOME has chalked off its broad to-do list.
"Investors can look forward to several additional near-term valuation catalysts over the coming months, including securing an offtake agreement for its Villeta production, completion of FEED, FID on Phase 1 and signing of its second Paraguayan PPA at Yguazu (Phase 2)."
'Buy' with a 220p target is Liberum’s view.